Staci Americas eBook Examines ‘Deadly Sins’ of B2C Order Fulfillment

To be successful, B2C order fulfillment operations need to be responsive and efficient to drive profitability and to keep customers happy and coming back. But for logistics leaders, it’s not always clear what improvement initiatives should take priority. A recent Staci Americas eBook, The 7 Deadly Sins of B2C Fulfillment, identifies top fulfillment mistakes made by B2C brands, along with the profit-driving action steps that can fix them.

Deadly Sins of B2C Order Fulfillment

1. Bad Forecasting

Your company’s fulfillment operations need accurate sales forecasts to match labor with demand. Poor forecasts beget bad labor plans that beget inflated operating costs – or worse, staffing levels that are inadequate to get orders out on time.

Your brand can’t get fulfillment right with a slack attitude toward sales forecasts.

Big retail does a decent job with forecasting. But more pure-play online sellers treat it as a “nice to have.”

The data is there. It’s just not being communicated to the people making staffing decisions in the warehouse. And you’re paying the price for this lack of collaboration.

How do you fix the problem?

With data.

• Historical data that already exists like monthly sales averages and seasonal and day-of-the-week sales trends.
• Data from marketing and merchandising departments on upcoming promotions and hot sellers.
• Data from your 3PL on historical volume spikes or lulls linked to certain products or times of the year.

2. A Single Warehouse Strategy

Brands need to stop saying they have a “national fulfillment network” when they only have one fulfillment warehouse.

When it comes to eCommerce delivery speed, you can’t get to everybody in the U.S. in 1–2 days with a single warehouse.

It’s impossible.

Facing this fact could save you a heap of trouble down the road. Because using a single warehouse to provide national B2C order fulfillment is nowhere near sustainable for your business – unless you have a unique or special product that customers are willing to wait for.

While a single DC makes sense for start-up brands, it's a harder strategy to rationalize if you're a high-volume B2C brand – especially since, in our analysis, there's at least a 10% net savings when you add a fulfillment center in another region. Sure, expansion will increase facility, inventory and labor costs. But parcel cost reductions more than outweigh these added costs.

How do you fix the problem?

Do a distribution network analysis to help you decide the optimal number of warehouses you should have and where they should be. To get this done, lean on your 3PL partner, if you have one, or outfits like Chicago Consulting that do this kind of work routinely.

The added complexity and resources required to run a multi-DC network are lessened, of course, if you work with a fulfillment 3PL that has a national network. Such a 3PL provides an easy solution to adapt and scale your network as your business grows.

3. Poor Retention of Warehouse Associates

What’s the single best thing you can do to dramatically increase throughput, improve order accuracy, and lower overall costs in your fulfillment warehouse?

Keep your workers!

Until machines completely replace people, the biggest productivity and profit killer in the B2C warehouse is an inability to hold on to warehouse workers.

Most acknowledge that labor is the toughest order fulfillment challenge right now. But the response tends to be more around recruitment than retention. If your workers leave as fast as they arrive, what have you accomplished – other than creating a highly efficient revolving door?

We estimate that each warehouse associate who leaves costs companies $8,500. And that’s just for HR-related departure and replacement costs. That doesn’t measure the productivity loss.

How do you fix the problem?

Simple employee care practices like the following are good investments:

• Keep up with market wages. If someone can earn $0.50/hour more down the street, changes are good they’ll go.
• Listen. Formally survey and informally speak to associates to understand why they are leaving.
• Show appreciation. A thank you card or $25 gift card are small investments to create happier associates that stay.
• Engage employees. Remind associates how their performance impacts the company’s success.
• Invest in developing your middle-level managers. They say associates don’t quit companies, they quit bosses. This is certainly true in the warehouse. Hire and train supervisors who know how to effectively manage fulfillment workers.

Check out the Full eBook

Brands need to get order fulfillment right. If you’re up for the challenge, be sure to check out The 7 Deadly Sins of B2C Fulfillment for full details on these and four additional fulfillment “sins.”